Traditional review and reviews of Arsager Management Company

Lazy Investor Blog > Stock Exchange

The manager has been working on the stock market since 2004 and successfully survived the 2008 stock market crisis. It is the first management company in Russia whose shares are included in the listing of the Moscow Stock Exchange. What funds does this organization offer, and why might they be of interest to an investor?

Statistical indicators

These indicators are calculated for 3 years.

Arsagera Mutual Funds

Today, Arsager Management Company manages 6 funds, 3 of them have existed since 2005, the rest were created in response to changing Russian economic realities, including a real estate investment fund, which was especially popular in 2013–2016. Let's take a closer look at these funds.

Arsagera – equity fund

It has existed since 2005, is an open-end mutual investment fund (OPIF), the fund’s annual balances have been available on the company’s website since 2007. The main emphasis in the portfolio is on the energy and oil and gas industries, but this is more likely the specifics of the Russian economy than the investment decision of the manager.

I also recommend reading:

What are the consequences of delisting shares for an investor?

What to do and what not to do in case of delisting of shares

2007 brought the fund losses of about 33%, but in the next 3 years the growth of the fund’s profitability is more conveniently measured using a term from the crypto industry - the fund gave “X’s”, hundreds of percent per annum. However, all this fully reflects the general situation on the market of that period. Over 10 years, the change in the value of the share amounted to 570%.

The management company's remuneration + expenses for the depository, registrar and audit amount to 3% of the share price.

Arsagera - mixed investment fund

This is also an open-end mutual fund, whose assets include shares and bonds of the largest Russian companies. The basic ratio of stocks and bonds in the fund is 50:50, with border values ​​up to 40:60. This means that if, as a result of the growth of shares included in the mutual fund, their share exceeds 60%, the fund will rebalance. The management company will sell part of the shares and use the proceeds to buy additional bonds to restore the proportion of 40:60 or even 50:50, depending on the market situation. Similar actions will be taken if one or another asset class falls. As a result, this management strategy provides the fund with good protection against drawdowns.

However, in 2007 (the fund's first public balance sheet), the fund fell 57%, much more than Arsager's 100% stock fund.

The change in the value of the share over 10 years is plus 375 - a more modest return compared to a stock fund.

The remuneration + expenses of the management company in total amount to 2% of the value of the share.

Arsagera – bond fund

The name speaks for itself. This fund is notable for the fact that the description mentions the amount of remuneration of the management company (0.5%), as well as the cost of entry and exit from the mutual fund. Finding similar information about other funds requires some persistence.

The remuneration + expenses of the management company in total amount to 0.52% of the value of the share.

Arsagera – shares 6.4

Interval mutual investment fund (IPIF), which includes Russian second-tier shares. An interval mutual fund differs from an open one in that the fund redeems shares not at the investor’s first request, but at a predetermined interval, for example, within 2 weeks, 2 times a year. This approach allows the fund to invest in less liquid, but potentially more profitable instruments - in this case, second-tier Russian stocks. The implication is that Arsagera - 6.4 shares - is a tool for aggressive, high-yield investments. This is the theory, but practice confirms it more or less clearly only over a long-term investment horizon.

I also recommend reading:

Capital expenditures CAPEX: how to analyze them

What an investor needs to know about capital expenditures CAPEX

Over the horizon of 3 and even 5 years, the fund shows growth that is not much greater than the increase in the Moscow Exchange index, with incomparable drawdowns. An additional disadvantage of interval funds is the lack of investment tax deduction when holding a share for more than 3 years. When redeeming an individual investment fund, the investor is required to pay 13% personal income tax, regardless of the period of ownership of the share.

The remuneration + expenses of the management company in total amount to 3% of the value of the share.

Arsagera – peace actions

Another interval mutual fund offering a portfolio of shares purchased on the NYSE, NASDAQ and XETRA exchanges. The portfolio is based on securities of companies from the USA and Germany. It is somewhat puzzling that there are just over 30 companies in the portfolio with a very wide industry and geographic coverage. Perhaps this targeted approach is due to a deep analysis of each issuer and its prospects in the relevant industry. The fund's benchmarks are the MSCI USA and MSCI World indices.

The fund began operations in 2021 and is still far behind the stated benchmark.

We do not have information about which shares worsened the performance of the mutual fund, but it is clear that the benchmark, which includes more than 1,600 issuers, is more resistant to drawdowns than a fund of 30 shares. The advantage of the index is that it is obviously better balanced.

The remuneration + expenses of the management company in total amount to 1.9% of the value of the share.

Arsagera – housing construction

Closed mutual fund (closed mutual fund), investing in residential real estate under construction.

The specifics of the asset determine the legal form of the instrument - a closed mutual fund. You cannot leave a closed-end mutual fund before the stated deadline; only its sale on the secondary market is possible. This is logical, since before the facility is put into operation, the fund cannot withdraw profits and transfer them to the investor.

Despite the good dynamics of the share price, the growth graph of net assets indicates a gradual decline in investor interest in this fund. The situation on the real estate market is difficult, and the specifics of a closed mutual fund actually equate it in terms of risk to direct investment in real estate.

I also recommend reading:

How to close an IIS and is it worth doing it ahead of schedule?

Pitfalls when closing an IIS: what you need to know

In the section devoted to the history of housing transactions, you can find that the fund’s income from the sale of apartments varied from 94 million rubles. in 2015 to 6.2 million rubles. for the first half of 2019. As of the date of writing this article, there are no apartments for sale in the fund.

The remuneration + expenses of the management company in total amount to 4.1% of the value of the share.

The price of the Arsagera-Share Fund share

The share price as of November 8, 2021 is RUB 7,208.99, NAV is RUB 464,937,361.18.

Recent price

The table “by month” shows the price for the last day of the month.

Change in unit value over 12 months

• Return for 12 months: 8.44%
• If you had invested 100,000 rubles on April 1, 2021, you would have received 108,436.38 rubles.

Here is a chart of changes in the value of the mutual fund "Arsagera-Share Fund":

• share profitability
• benchmark index return

Change in share value over 3 years

• Profitability for 3 years: 79.35%
• If you had invested 100,000 rubles on April 1, 2015, you would have received 179,348.10 rubles.

See the graph of changes in the value of the Arsagera-Share Fund share within 36 months:

• share profitability
• benchmark index return

Description and my reviews about the Arsager company

According to the portal investfunds.ru, in the rating of management companies as of May 31, 2019, Arsagera ranks 9th in terms of the volume of funds raised in open-end funds, and 18th in terms of net asset value (RUB 765.23 million). You need to understand that the first 7–8 positions are occupied by large banking structures: Sberbank, VTB, Alfa, Gazprombank. Therefore, it would be more correct to compare Arsagera as part of holdings, separately from specialized management companies for which financial management is the main or only business. If such a rating existed, Arsager Management Company would most likely be in the top three in terms of key indicators.

The company has developed its own index, which is called the Arsager index. Its essence comes down to calculating the difference between the fundamental and actual capitalization of the Moscow Exchange index. The indicator reflects the position of the developers: current stock prices are too susceptible to the influence of news noise. The index has been calculated since 2005 and has repeatedly proven its usefulness during periods of instability and panic in the market, when current stock prices can completely lose touch with their fundamental value.

You can read more about the Arsagera index in a special section on the company’s official website https://arsagera.ru/analitika/indeks_arsagery.

Similar mutual funds

How do we determine the similarity of mutual funds to each other?

Show all mutual funds from the database

Reviews from clients of Arsager Management Company

Arsager Management Company demonstrates maximum openness and transparency in everything related to the provision of information about the strategies used, the composition of fund portfolios and their financial performance in the maximum time retrospective. All the more surprising is the reluctance of clients to share their impressions of working with the company. There are practically no reviews of Arsagera’s services online. There are only discussions of the management company and the results of its individual funds on specialized forums, but opinions are expressed by people who are not holders of Arsagera mutual funds.

Investment objects

The funds of shareholders within the fund are invested in shares of the most efficient Russian companies. The main difference between this fund and the open-end mutual fund of market financial instruments "Arsagera - share fund" is that the portfolio of open-end investment fund of market financial instruments "Arsagera - shares 6.4" can purchase shares of companies of medium and small capitalization. Unlike blue chips, it is quite difficult to sell or buy a significant volume of these securities on the stock exchange without affecting the quotes. Market participants usually refer to these companies as the “second echelon”. Statistics from developed stock markets show that over long time intervals, despite possible periods of market decline, shares are the most profitable financial instrument compared to other investments (bonds, deposits, real estate). Moreover, over the long term (3-5 years), the stock prices of mid- and small-cap companies show more impressive performance than blue chip stocks.

Risk/reward ratio

The only investment objects of this fund are shares of Russian issuers. This was done because Arsagera Management Company PJSC adheres to a strategy of clearly defined product specialization based on risk. This enables our clients to understand the level of risk involved in their investments and to be confident that the risk level once chosen will not change.

It is important to understand that the measure of risk determines profitability. The more profitability an investor wants to receive, the more risk he must accept. Below is the fund's position on the risk/return scale compared to the company's other products.

Despite the relatively high average returns of the stock market, investors should be prepared for the fact that in the short and medium term the value of investments may fall below the value of the funds originally invested.

Efficiency and business development potential are not the only criteria when choosing investment objects. In addition to the above criteria, we also pay attention to the scale of a company's business and the liquidity of its shares - factors that determine the risk of investing in equity instruments. Smaller businesses (mid- and small-cap companies) are less stable and predictable, which makes forecasting the financial results of such companies more difficult. In addition to this, mid- and small-cap stocks have limited liquidity. This leads to the fact that a prompt exit from such investments is possible, as a rule, only if the asset is sold at a discount to the market price (in certain cases, it may be impossible in principle to promptly exit an asset).

Asset selection

The history of the functioning of stock markets in developed countries and research by Arsagera Management Company PJSC, conducted on the Russian stock market, show that in the medium and long term, the exchange rate dynamics of a company’s shares are influenced, first of all, by its economy. Therefore, at Arsagera Management Company PJSC, we consider the purchase of securities of domestic companies not as a game on fluctuations, but as an investment in their business.

The stock market is and will be an integral part of the market economy, which allows companies to raise funds for their own development, and provides investors with the opportunity to participate and own an effective business.

Accordingly, investors who invest regularly and over a long period of time benefit the most. Regular and competent investment is the key to human well-being.

Our company strives to create for its clients the opportunity to invest capital in the most effective Russian assets, as well as become their co-owners and participate in the profits of the most successful Russian enterprises.

The key to successful forecasting of prices of financial assets is the use of economic models. The acquisition of company shares is preceded by a multi-level analysis, during which a comprehensive study of factors influencing the activities of companies is carried out. The search for the most promising investment objects is carried out using economic models at all stages of analysis.

At the first stage, the external conditions in which the company operates are subjected to a detailed analysis: the macroeconomic situation in the country, the development of the industry in which the company operates (the balance of supply and demand is predicted, and a forecast of the price environment for industry products is made).

At the second stage, a thorough analysis of specific issuers is carried out, the result of which is a forecast of the main financial indicators of the enterprise (revenue, net profit, equity, etc.).

Thanks to such in-depth study, shareholders of the open-ended mutual fund of market financial instruments "Arsagera - shares 6.4" can be sure that by purchasing a share of this fund, they become the owners of the most effective and promising Russian companies.

When choosing investment objects, their current and projected future values ​​are compared, thus determining the potential return on assets. Potential profitability is the main criterion when investing, which creates the basis for applying a full investment strategy. All funds of the fund are invested in shares, i.e. there is no money in the fund. This is because the potential return on cash is zero (merely holding cash does not generate income). Cash appears only when the portfolio is restructured or as a result of new shareholders joining the fund.

Billions of Arsagers

A billion rubles, or more precisely as of March 31, 2021, 1,153,138,218 rubles - this is exactly how much Arsager Management Company to its clients over 10 years of management (the figure already takes into account the commission for management and support of funds).

Analyzing information on deposits/withdrawals of funds from management, I decided to calculate the amount that the management company has earned for its clients over the entire period.

It was necessary to add up all the inputs and subtract all the withdrawals to the funds, and compare them with the current amounts in management. In the calculation, I assume that the totality of input/output actions is carried out by one client, despite the fact that in practice this is the totality of the results of all clients.

I found figures for all funds and individual trust management (ITU) separately and as a whole.

Weightily

The result is very good, considering the weighted average amount invested - the profit turned out to be quite decent. Excellent yield of 17.2% per annum with compound interest. Compare with the deposit for this period of about 9.03% per annum. 8% real yield is a lot! Let me remind you that the real return on the most profitable savings instrument (shares) - index funds in the long term in different countries from 2% to 7% per annum, and 80% of market participants and all deposit holders lose to this result!

Now, I think, it’s clear what Arsager’s Management Company does – it makes money for its clients!

At the moment, investors have already withdrawn funds (1.8 billion rubles) more than they brought in (1.7 billion rubles) by 101.7 million rubles! In fact, there was a constant conclusion, I calculated that if all these 10 years clients had not withdrawn funds, but left the funds entered, then at the moment the amount under Arsagera’s management would have been 8.4 billion rubles (1.7 billion rubles entered and profit 6.7 billion rubles), the numbers are amazing. Time and compound interest work wonders! I just can't believe these numbers!

I myself am a shareholder of the Arsagera funds and am quite satisfied with the work of the management company.

Important point. In the West, it is generally accepted that the profitability of a fund is greatly influenced by the personal investments of its managers. According to their data, managers who have invested money in their funds receive higher returns and have lower costs.

In principle, this is true, I did research - the Foundation that makes alpha. 2021

The share of employees and top management in the mutual funds of Arsager Management Company is 25-50%, and together with shareholders - 50-80%. The main payers of the remuneration of Arsagera Management Company are shareholders, managers and employees, and not external clients. Information about the share of employees and shareholders is a mandatory attribute of quarterly reporting on funds.

But external clients can also join and receive all the benefits of working with Arsager Management Company.

You just have to cross the threshold...

When you are already inside, golden rain pours on you. And the longer you stay there, the heavier this rain will be.

Happy investment!

Since I am a member of the board of directors of the management company, as well as an employee of the company, it is necessary to add a mandatory block in accordance with the law:

The value of investment shares may increase and decrease, the results of investing in the past do not determine future income, and the state does not guarantee the profitability of investments in mutual funds. Before purchasing an investment share, you should carefully read the rules of trust management of a mutual investment fund. Charging discounts (surcharges) will reduce the return on investment in investment units of a mutual fund. The rules of the closed real estate mutual fund "Arsagera - Housing Construction" are registered by the Federal Financial Markets Service of Russia: 0402-75409534 dated September 13, 2005. The rules of the closed real estate mutual fund "Arsagera - residential buildings" are registered by the Federal Financial Markets Service of Russia: 0852-75409273 dated June 14, 2007. The rules of the open-ended mutual fund of shares "Arsagera - share fund" are registered by the Federal Financial Markets Service of Russia: 0363-75409054 dated 06/01/2005. The rules of the open-ended mutual investment fund "Arsagera - mixed investment fund" are registered by the Federal Financial Markets Service of Russia: 0364-75409132 dated 06/01/2005. Rules of the mutual investment fund of shares "Arsager - shares 6.4" registered by the Federal Financial Markets Service of Russia: 0439-75408664 dated December 13, 2005. The rules of the open mutual fund of bonds "Arsagera - bond fund KR 1.55" were registered by the Bank of Russia Service for Financial Markets: No. 2721 dated January 20, 2014. License of the Federal Financial Markets Service of Russia to carry out activities related to the management of investment funds, mutual funds and non-state pension funds: No. 21-000-1-00714 dated 04/06/2010 with no expiration date. License of the Federal Financial Markets Service of Russia to carry out securities management activities: 078-10982-001000 dated January 31, 2008 without limitation of validity.

OJSC "UK "Arsagera"

St. Petersburg, st. Shatelena, 26A, Business Center "Renaissance", 8th floor

Tel., fax: (812) 313-05-33

www.arsagera.ru